1. Field of the Invention
The invention relates to on-line auction management. More specifically, the invention provides a system and method for efficiently determining the winning bidder and winning price for goods offered for sale in an on-line auction environment.
2. Discussion of the Related Art
Traditional auctions generally consist of a physical gathering that requires the presence of all bidders. The goods being offered for sale must generally be physically present at the auction location for inspection by potential bidders and pick-up by the buyers. An auctioneer solicits bids from the floor for a given item or set of items, however, once the highest bid is accepted, the sale is closed and the next set of goods is brought to the floor. Thus, determining the winner of a conventional auction does not require significant effort because the winner is simply the person to bid the highest amount, i.e., typically the last bid.
The emergence of on-line auctions has significantly expanded the scope of auction formats available, the number of bidders that an auction can support, as well as the number of goods that may be auctioned off during an auction session.
One type of auction format supported on-line is the English auction, which generally relies upon the submission of ascending bids with the highest bidder winning the auction. Other types of actions supported on-line include reverse auctions and sealed auctions.
There are also several different techniques for bidding in an auction. Typically, the bidding simply ascends to a final sale price. Alternatively, in a reverse auction format, the bidding begins with a ceiling price and bidder's proceed from that price. Proxy bids are another variant on bidding. A proxy bid is a bid that doesn't have a bid price, instead the proxy bid is an indicator of the upper limit the bidder is willing to offer. Thus, as the bids ascend from a base price, a bidder submitting a proxy bid will win the auction if no one has bid higher than his or her proxy bid.
In the on-line auction environment, the auction engine is tasked with determining the winner. In a proxy bid format auction, the auction engine determines the winning price as the lowest price that would allow the bidder to win the auction, but not higher than the limit price For example, in a one-item auction with a bid increment of $1, if a bidder has a proxy bid with a limit price of $50, and someone else has a bid price of $30, the auction engine should bid $31 for the proxy bid, so that the highest bidder (the person bidding $50) wins the auction without paying any more than needed to win the auction.